Topics: EPLI Coverage
Available as a policy endorsement or stand-alone coverage, EPLI provides protection against many kinds of employment-related claims, including:
Also covered are breach of an employment contract, negligent evaluation, failure to employ or promote, wrongful discipline, deprivation of a career opportunity, wrongful infliction of emotional distress and mismanagement of employee benefit plans. While an essential coverage tool, EPLI policies are not all encompassing. They commonly exclude criminal or civil fines, penalties or punitive damages, bodily injury and property damage claims, state unemployment insurance claims, workers’ compensation claims, and claims filed under the Fair Labor Standards and Occupational Safety and Health Acts. Most EPLI policies will reimburse a company for the costs of defending a lawsuit in court, as well as for judgments and settlements. The policy usually covers legal costs, regardless of the suit’s outcome.
Understanding your employees’ rights is paramount to protecting your business. During FY 2018, the EEOC resolved 90,558 charges of employee discrimination, securing $505 million for victims in both private sector and government workplaces. More than 40 percent of EPLI-related lawsuits are filed against private companies with fewer than 100 employees. Other notable stats illustrate the importance of EPL Insurance:
According to industry experts, pregnancy discrimination, medical marijuana use and sexual harassment claims are among the top trending employment practices litigation cases. Moreover, the average cost of employment-related claims is rising, along with the length of time it takes to resolve a claim. Sexual Harassment Lawsuits. The growth of the #MeToo movement has contributed to a significant jump in harassment lawsuits filed with the EEOC over the past two years. In 2018, the EEOC recovered approximately $70 million for those filing claims, according to The National Law Review. Medical Marijuana Use. On April 9, 2019, the New York City Council passed a law that will prohibit employers from conducting pre-employment drug testing for marijuana. This decision could spark the creation of similar legislation across the country. As state cannabis laws continue to evolve, employers must educate themselves for their protection. Website Accessibility Lawsuits. In today’s digital age, many individuals cannot use websites that are not accessible to the blind and visually impaired. In the eyes of the law, this is a violation of the Americans with Disabilities Act. As a result, claims are on the rise. Whistleblower Claims. Enforcement actions in response to whistleblower claims have resulted in more than $1 billion in fines and penalties, according to the Securities and Exchange Commission. Invasion of Employee Privacy. Whether it’s done from a computer or through the lens of a security camera, many companies monitor their employees at work. While employers have rights in the workplace, so do their employees. Employee privacy is becoming one of the biggest hot-button employment issues. Illegal Background Checks. The Fair Credit Reporting Act (FCRA) sets national standards for employment screening. Two common tools employers use to screen candidates are credit reports and criminal background reports. However, a candidate must provide written consent before an employer can request these documents. Businesses that attempt to secure this information without a candidate’s consent are inviting a potentially damaging lawsuit. Pregnancy and Lactation Accommodations. The Pregnancy Discrimination Act requires employers to allow pregnant employees to work at their jobs as long as they can perform their duties. Additionally, employers must accommodate nursing mothers with lactation breaks as well as private, sanity lactation spaces. Genetic Discrimination. GINA, the Genetic Information Nondiscrimination Act, prohibits employers from using genetic information as a factor in employment-related decisions. Under GINA, employers cannot request family medical history or any other kind of genetic information from job applicants. Unpaid Internships. Employee or intern? It’s a question the U.S. Department of Labor can answer. Interns, unlike employees on a payroll, are not subject to the Fair Labor Standards Act. To protect themselves, businesses should know what defines an internship. Visit the Department of Labor’s Test for Unpaid Interns for six key criteria.
Taking the following steps will help reduce your employment practices liability risk:
Like their larger counterparts, small businesses can be the target of a potentially devastating lawsuit. Helping protect thousands of small businesses like yours, AmTrust can customize our coverage to safeguard your business against any employment-related risks. This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.
Statistically, it’s three times more likely to happen than a fire. But like a devastating blaze, it could destroy your business. It’s an employee lawsuit. If you own a small business, the risk of being sued by an employee is very real. According to the U.S. Equal Employment Opportunity Commission (EEOC), employees of businesses big and small filed over 90,000 employment-related claims in 2016 alone. In this article, we’ll take a look at five industries that are ideally suited for Employment Practices Liability Insurance or EPLI.